SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT AND WAIVER (this "Amendment"), dated as
of June__,2000, is by and among Xxxxxx American Corp. (the "Borrower"), Xxxxxx
American Investment Corp. (the "Parent"), Xxxxxx American Group, Inc.
("Interco") and the certain subsidiaries of the Parent identified on the
signature pages hereto (together with the Parent and Interco, the "Guarantors"),
the lenders identified on the signature pages hereto (the "Lenders"), Bank of
America, N.A. (formerly known as NationsBank, N.A.), as agent for the Lenders
(in such capacity, the "Agent"), and Gleacher NatWest Inc., as documentation
agent (the "Documentation Agent").
W I T N E S S E T H
WHEREAS, the Borrower, the Guarantors, the Lenders, the Agent and the
Documentation Agent have entered into that certain Credit Agreement dated as of
May 18, 1998, as amended as of May 27, 1998, December 18, 1998, March 19, 1999,
September 30, 1999, March 29, 2000 and May 2, 2000 (as so previously amended the
"Existing Credit Agreement"); and
WHEREAS, the parties to the Existing Credit Agreement have agreed to amend the
Existing Credit Agreement and waive certain provisions thereof as provided
herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth, and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:
PART 1
DEFINITIONS
SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as amended
hereby.
"Amendment No. 6 Effective Date" is defined in Subpart 3.1.
SUBPART 1.2 Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Amended Credit Agreement.
PART 2
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No.6 Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part 2. Except as so amended, the Existing Credit Agreement and all other Credit
Documents shall continue in full force and effect.
SUBPART 2.1 Amendments to Section 1.1.
(a) The following definitions appearing in Section 1.1 of the Existing Credit
Agreement are amended and restated in their entireties to read as follows:
"Investment and Deposit Agreement" means the Second Amended and Restated
Investment and Deposit Agreement, dated as of June__, 2000, between the
Sponsor and the Agent, as amended, modified, restated or supplemented from
time to time.
"Leverage Reduction Period" means the period from and including the Amendment
No. 5 Effective Date through and including June 30, 2000; provided,
however, that the Leverage Reduction Period automatically shall be extended
on June 30, 2000 to August 31, 2000 if (A the Shirt Group Restructuring
shall not have been consummated by June 30, 2000, but there shall exist one
or more legally binding and enforceable definitive purchase (or other
appropriate) agreements (as determined by the Agent in its sole reasonable
discretion, supported by such opinions of counsel for the applicable
Consolidated Party(ies) and/or the relevant purchaser(s) as the Agent shall
reasonably request) providing for the consummation of the Shirt Group
Restructuring by August 31, 2000 and (B either (1) cash and/or Cash
Equivalents in an aggregate amount at least equal to the Investment
Commitment as of June 30, 2000 shall be on deposit in the Cash Collateral
Account or (2) the Sponsor Letter of Credit shall have been issued and
delivered to the Agent.
"Leverage Reduction Requirements" shall be deemed to have been satisfied as of
the last day of the Leverage Reduction Period if, as of the most recent
fiscal month end preceding the date of determination with respect to which
the Agent has received the Required Financial Information, (i) the Fixed
Charge Coverage Ratio is at least 1.0 to 1.0, (ii) the Interest Coverage
Ratio is at least 1.5 to 1.0, (iii) the Senior Leverage Ratio is no greater
than 3.25 to 1.0 and (iv) the Total Leverage Ratio is no greater than 5.5
to 1.0. For purposes of any determination under this definition, (1) all
calculations shall be made on a pro forma basis using the principles set
forth in clauses (2), (3) and (4) below and Section 1.3, (2) any Asset
Disposition consummated after the Amendment No. 5 Effective Date and any
prepayment made pursuant to Section 3.3(b)(v)(B) of the Credit Agreement
after the Amendment No. 5 Effective Date shall be deemed to have occurred
as of the most recent fiscal month end preceding the date of determination
with respect to which the Agent has received the Required Financial
Information, (3) liabilities for restructuring costs (such as liabilities
for severance payments and lease termination payments and, to the extent
that the aggregate amount thereof exceeds the amount of accounts receivable
associated with the related Equity Interests or Property, accounts payable
and accrued expenses associated with such Equity Interests or Property)
resulting from all Asset Dispositions relating to any Equity Interests or
Property comprising the Shirt Group consummated on or before the last day
of the Leverage Reduction Period shall be deemed to constitute Indebtedness
of the Consolidated Parties and (4) Funded Indebtedness of the Consolidated
Parties on such date shall be deemed to be increased by the amount as of
such date, as reasonably calculated by the Borrower, of the non-recurring
benefit to leverage associated with a sale of receivables to the
Receivables Financing Subsidiary and the corresponding prepayment of the
Credit Party Obligations, provided that, in no event shall such increase
exceed the Net Cash Proceeds from such sale of receivables. Solely for
purposes of this definition, Funded Indebtedness of the Consolidated
Parties shall be calculated without netting for (a) cash or Cash
Equivalents on deposit in the Cash Collateral Account or (b) the amount
available to be drawn under the Sponsor Letter of Credit.
"Senior Leverage Ratio" means, as of the last day of any fiscal quarter of the
Consolidated Parties for the twelve month period ending on such date, the
ratio of (a) all Funded Indebtedness (net of cash and Cash Equivalents,
including cash and Cash Equivalents on deposit in the Cash Collateral
Account, and net of the amount available to be drawn under the Sponsor
Letter of Credit) of the Consolidated Parties on a consolidated basis on
the last day of such period, excluding (i) Subordinated Indebtedness,
(ii) the Tranche C Obligations and (iii) any Credit Party Obligations in
which a participation interest has been purchased by, or on behalf of, the
Sponsor pursuant to Section 2.1(c) or Section 2.2(c) of the Investment and
Deposit Agreement, to (b) Consolidated EBITDA for such period.
"Total Leverage Ratio" means, as of the last day of any fiscal quarter of the
Consolidated Parties for the twelve month period ending on such date, the
ratio of (a) all Funded Indebtedness (net of cash and Cash Equivalents,
including cash and Cash Equivalents on deposit in the Cash Collateral
Account, and net of the amount available to be drawn under the Sponsor
Letter of Credit) of the Consolidated Parties on a consolidated basis on
the last day of such period, including Subordinated Indebtedness, but
excluding (i) the Tranche C Loans Obligations and (ii) any Credit Party
Obligations in which a participation interest has been purchased by, or on
behalf of, the Sponsor pursuant to Section 2.1(c) or Section 2.2(c) of the
Investment and Deposit Agreement, to (b) Consolidated EBITDA for such
period.
(b) The following new definition is hereby added to Section 1.1 of the Existing
Credit Agreement in the appropriate alphabetical order and shall read as
follows:
"Sponsor Letter of Credit" means an irrevocable standby letter of credit issued
by Bank of America, N.A. for the account of the Sponsor in favor of the
Agent, for the benefit of the Lenders other than the Tranche C Lender (in
its capacity as such), in the form of Exhibit 1.1C having a maximum face
amount equal to the Investment Commitment as of June 30, 2000 (less the
aggregate amount of cash and Cash Equivalents on deposit in the Cash
Collateral Account on such date).
SUBPART 2.2 Amendments to Section 8.5. Section 8.5 of the Existing Credit
Agreement is amended and restated in its entirety to read as follows:
8.5 Asset Dispositions.
The Credit Parties will not permit the Parent or any Consolidated Party to make
any Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than Excluded Asset Dispositions and a Permitted Austell
Property Sale, unless (a) except in connection with the licensing of any of the
intellectual property of the Shirt Group on terms providing for the reversion to
the applicable Consolidated Parties of all rights to such intellectual property
at the end of the license term and upon default in the payment of licensing fees
by the applicable licensee thereof, the consideration paid in connection
therewith is at least 75% cash or Cash Equivalents, (b) if such transaction is a
Sale and Leaseback Transaction, such transaction is permitted by the terms of
Section 8.13 and (c) the Credit Parties shall, immediately following the
consummation of such Asset Disposition apply (or cause to be applied) an amount
equal to the Net Cash Proceeds of such Asset Disposition to prepay the Credit
Party Obligations in accordance with the terms of Section 3.3(b)(iii).
Notwithstanding any provision of this Credit Agreement to the contrary, (i) no
Asset Disposition involving any portion of the Sock Group shall be permitted
unless simultaneously all of the Credit Party Obligations are repaid and this
Credit Agreement is terminated in accordance with the terms of Section 11.13(b)
except pursuant to a transaction permitted under clause (ii)(A) below and
(ii) none of the Consolidated Parties may sell, lease, transfer or otherwise
dispose of accounts receivable except pursuant to (A) up to three (3) Asset
Dispositions of receivables having an aggregate fair market value (for both of
such transactions taken together) of not greater than $24,000,000 by one or more
Consolidated Parties to the Receivables Financing Subsidiary and each of which
(1) is non-recourse to the Consolidated Parties (except for representations,
warranties, covenants and indemnities which are reasonably customary in an
accounts receivable transaction), (2) complies with the foregoing terms of this
Section 8.5, (3) does not constitute an "Asset Sale" under and as defined in the
documents evidencing or governing the Senior Subordinated Debt and (4) is
consummated by August 31, 2000 and (B) a transaction constituting an Excluded
Asset Disposition.
Upon a sale of Property (including, without limitation, the sale of Equity
Interests of a Consolidated Party) permitted by this Section 8.5, the Agent
shall (to the extent applicable and provided that such Person is also released
from any and all of its obligations, if any, in respect of all other
Indebtedness of the Credit Parties) deliver to the Credit Parties, upon the
Credit Parties' request and at the Credit Parties' expense, such documentation
as is reasonably necessary to evidence the release of the Agent's security
interest, if any, in such Property or Equity Interests, including, without
limitation, amendments or terminations of UCC financing statements, if any, the
return of stock certificates, if any, and the release of such Consolidated Party
from all of its obligations, if any, under the Credit Documents.
SUBPART 2.3 Amendments to Section 9.1. Subsection (m) of Section 9.1 of the
Existing Credit Agreement is amended and restated in its entirety to read as
follows:
(m) Investment and Deposit Agreement. There shall occur and be continuing any
"Event of Default" under, and as defined in, Section 6.1(a) or (h) of the
Investment and Deposit Agreement; or
SUBPART 2.4 New Exhibit 1.1C. A new Exhibit 1.1C in the form of Exhibit 1.1C
attached hereto is added to the Existing Credit Agreement immediately succeeding
existing Exhibit 1.1B thereof.
PART 3
EFFECTIVENESS
SUBPART 3.1 Amendment No. 6 Effective Date. This Amendment shall be and become
effective as of the date hereof (the "Amendment No. 6 Effective Date") when all
of the conditions set forth in this Part 3 shall have been satisfied, and
thereafter this Amendment shall be known, and may be referred to, as "Amendment
No. 6."
SUBPART 3.1.1 Execution of Counterparts of Amendment. The Agent shall have
received counterparts of this Amendment which collectively shall have been duly
executed on behalf of each of the Borrower, the Guarantors and the Required
Lenders.
SUBPART 3.1.2 Investment and Deposit Agreement. The Agent shall have received an
original copy of the Investment and Deposit which shall have been duly executed
on behalf of the Sponsor.
PART 4
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this Amendment to any Part or
Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 4.2 Instrument Pursuant to Existing Credit Agreement. This Amendment is
a Credit Document executed pursuant to the Existing Credit Agreement and shall
(unless otherwise expressly indicated therein) be construed, administered and
applied in accordance with the terms and provisions of the Existing Credit
Agreement.
SUBPART 4.3 References in Other Credit Documents. At such time as this Amendment
No. 6 shall become effective pursuant to the terms of Subpart 3.1, all
references in the Credit Documents to the "Credit Agreement" shall be deemed to
refer to the Credit Agreement as amended by this Amendment No. 6.
SUBPART 4.4 Counterparts/Telecopy. This Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
Delivery of executed counterparts of this Amendment by telecopy shall be
effective as an original and shall constitute a representation that an original
shall be delivered.
SUBPART 4.5 Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SUBPART 4.6 Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF the Borrower, the Guarantors and the Required Lenders have
caused this Amendment to be duly executed on the date first above written.
CREDIT PARTIES: XXXXXX AMERICAN Corp.
Xxxxxx American Investment Corp.
Xxxxxx American Group, Inc.
CONSUMER DIRECT CORPORATION
ARROW FACTORY STORES, INC.
GAKM RESOURCES CORPORATION
XXXXXX PEABODY RESOURCES CORPORATION
XXXXXX XXXXXXX HOLDING CORP.
XXXXXX, PEABODY & CO., INC.
BIDERTEX SERVICES INC.
GREAT AMERICAN KNITTING XXXXX, INC.
XXXXXX DESIGNER GROUP, INC.
BIDERMANN TAILORED CLOTHING, INC.
By:
Name:
Title:
AGENT: BANK OF AMERICA, N.A.
(formerly known as NationsBank,
N. A.), as Agent
By:
Name:
Title:
LENDERS: BANK OF AMERICA, N.A.
(formerly known as NationsBank,
N. A.)
By:
Name:
Title:
NATIONAL WESTMINSTER BANK PLC
By:
Name:
Title:
FLEET BANK, N.A.
By:
Name:
Title:
BANKBOSTON, N.A.
By:
Name:
Title:
FLEET BUSINESS CREDIT CORPORATION
(successor in interest to Sanwa
Business Credit Corporation)
By:
Name:
Title:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:
Name:
Title:
By:
Name:
Title:
FIRST SOURCE FINANCIAL LLP,
By: First Source Financial Inc.,
its manager
By:
Name:
Title:
(Signatures Continued)
GENERAL ELECTRIC CAPITAL
CORPORATION
By:
Name:
Title:
SUMMIT BANK
By:
Name:
Title:
HSBC BANK USA
By:
Name:
Title:
AG CAPITAL FUNDING PARTNERS, L.P.
By: Xxxxxx Xxxxxx & Co., L.P. as
Investment Advisor
By:
Name:
Title:
NORTHWOODS CAPITAL LIMITED
By: Xxxxxx Xxxxxx & Co., L.P. as
Collateral Manager
By:
Name:
Title:
NEW YORK LIFE INSURANCE COMPANY
By:
Name:
Title:
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By:
Name:
Title:
ML CLO XX PILGRIM AMERICA (CAYMAN)
LTD.
By:
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
Name:
Title:
GREAT POINT CLO 1999-1 LTD.
By: Sankaty Advisors, Inc., as
Collateral Managers
By:
Name:
Title:
XXXXX XXXXX SENIOR INCOME TRUST
By:
Name:
Title:
Exhibit 1.1C
Form of Sponsor Letter of Credit
